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GBP/USD Forex Signal: Fragile Support at $1.1824


US Dollar running out of momentum, bust risky currencies look weak.

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My previous GBP/USD signal on 27th February may have produced a losing short trade from the bearish pin bar at the resistance level which I had identified at $1.2029.

Risk 0.75%.

Trades must be taken before 5pm London time today only. 

  • Long entry following a bullish price action reversal on the H1 timeframe immediately upon the next touch of $1.1824 or $1.1721.
  • Place the stop loss 1 pip below the local swing low.
  • Move the stop loss to break even once the trade is 25 pips in profit.
  • Remove 50% of the position as profit when the price reaches 25 pips in profit and leave the remainder of the position to ride.
  • Short entry following a bearish price action reversal on the H1 timeframe immediately upon the next touch of $1.1958.
  • Place the stop loss 1 pip above the local swing high.
  • Move the stop loss to break even once the trade is 25 pips in profit.
  • Remove 50% of the position as profit when the price reaches 25 pips in profit and leave the remainder of the position to ride.

The best method to identify a classic “price action reversal” is for an hourly candle to close, such as a pin bar, a doji, an outside or even just an engulfing candle with a higher close. You can exploit these levels or zones by watching the price action that occurs at the given levels.

I wrote in my previous forecast for the GBP/USD currency pair that we were seeing a significant bearish development, with the price breaking down below the key support level at $1.1936. If the first two hours of the London session saw consecutive lower closes below $1.1936, I would be happy to enter a short trade.

This was a good call in an inverted way, as the price rose strongly as the London session got underway, so my plan was enough to keep anyone out of a disastrous short trade entry below $1.1950.

After rising strongly that day, and trading more bullishly mostly above $1.2000 for some days afterwards, the price action has become more bearish again, with renewed strength in the US Dollar, the US 2-Year Treasury Yield reaching new 15-year highs, and increased expectations of higher rates and potentially a recession in the USA.

Two days ago, the price fell very sharply on Fed Chair Powell’s testimony, and yesterday it reached a new 3-month low.

Over recent hours, we have seen the key support level at $1.1824 start to provide some weak and shaky support, preventing much of a further fall. It does start to look as if the US Dollar has run out of bullish momentum and is about to make some kind of pullback.

So, we may have a long trade opportunity here from a bullish bounce at $1.1824, but this is probably best taken as a scalp as it looks weak and shaky, with the price still prone to a sudden sharp fall. Any such long trade should be carefully monitored, and floating profits protected, on a short time frame.

GBP/USD

There is nothing of high importance scheduled today concerning either the GBP or the USD.

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